After tax IRA contributions

Forum|Forum|1 year ago
March 11, 2025
1 reply
6 views

Hi all,

I had a 401K from a previous employer that I rolled into a traditional IRA. I was then advised to contribute into the IRA which I have been doing for years and just realized I was contributing after-tax amounts to a pre-tax IRA for which I'm not getting any deductions credit. If I make withdraw from the IRA how would I calculate the after-tax contributions I made for the last 20 yeas will TT help me figure this amount? or Can I withdraw the total after-tax contributions from the IRA account without paying tax?

Will appreciate some guidance on this.

AmyC

Level 15

1. How to figure your after tax contributions.

If you were making contributions each year, you would have either deducted the contribution from your income taxes or you would have filed form 8606 for the nondeductible contributions.
Double check all your prior returns to see what happened each year.
If you see that contribution were not deducted and there is no form 8606, you will need to recreate all of them and mail them separately to the IRS. Be sure to sign each 8606 and mail them with tracking.
You can use your form 5498 that you get each year you contribute for your proof (if asked) and to help you determine your basis - already taxed monies.

See About Form 8606, Nondeductible IRAs

2. No, you can't withdraw $xx tax free and call it a withdrawal of basis. Any distributions will be part basis and part taxable once you have your basis figured out, form 8606.

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CP01Author

Level 5

Thanks Amy will look for the form.

What if I make a withdraw how will I input it in TT as IRS says it's calculated by percentage. Will TT walk me through the process?

DanaB27

Level 15

Yes, after you enter all you Form 1099-Rs for the distribution you will click continue to get to the follow-up questions related to Form 8606:

Click on "Search" on the top right and type “1099-R”
Click on “Jump to 1099-R”
Click "Continue" and enter the information from your 1099-R
On the "Review your 1099-R info" screen click "Continue" after adding all Form 1099-Rs
Answer "Yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.
Answer the questions about the basis from line 14 of your 2023 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

TurboTax will calculate the nontaxable portion on Form 8606. Note, if you have a * next to line 13 then TurboTax is using the Taxable IRA Distribution Worksheet to calculate the nontaxable portion according to Pub 590-B.

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